SNL Releases P&C Insurance Outlook for 2015 through 2019

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Auto lines will pressure near-term P&C industry underwriting results, according to SNL’s inaugural industry projections.

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Softening in prices across many commercial lines of business may be mitigated by macroeconomic factors, resulting in lower, but still positive, premium growth.

According to SNL’s P&C industry projections released today in a new report, SNL Insurance expects the personal and commercial auto insurance lines to help trigger modest erosion in underwriting profitability in 2015. Higher losses in the private-passenger auto business threaten a two-year streak of underwriting profitability in the personal lines sector. SNL projects a personal lines combined ratio of 100.2% for 2015. Personal lines combined ratios have been under 100% since 2013. The projected commercial lines combined ratio of 95.4% would mark an increase from the industry's 93.3% result in 2014.

The key measure of P&C underwriting profitability, a combined ratio represents incurred losses and expenses as a percentage of premiums. A combined ratio over 100% indicates underwriting losses, while a sub-100% combined ratio indicates profitability. Achieving strong underwriting results is particularly important for P&C insurers in the current environment as low interest rates continue to pressure yields on investment portfolios.

“Softening in prices across many commercial lines of business may be mitigated by macroeconomic factors, resulting in lower, but still positive, premium growth,” said U.S. P&C Insurance Market Report author Tim Zawacki. "Recent improvements in homeowners profitability could result in a continued slowing of rate increases in that business line, but rising losses may lead auto insurers to push for additional hikes for consumers and businesses, alike."

SNL projects that the personal and commercial auto lines will see robust levels of premium growth in 2015 as several large carriers implement rate increases to address rising losses. But the benefits from those actions may not fully take hold until 2016 when SNL projects that underwriting profitability will begin to improve in those lines.

SNL’s reports that the aggregate level of approved rate changes in the private-passenger auto liability line during the past 18 months exceeded that of the homeowners line in a reversal of a multiyear trend. The P&C insurance outlook for 2015 through 2019 is based on a 10-year historical review and uses SNL’s proprietary industry aggregates and rates data. It represents SNL Insurance’s foray into industry projections and expands upon the research offering of SNL Financial.

For a copy of the full report, or to interview the report’s author, Tim Zawacki, please email Christina Twomey at ctwomey(at)snl(dot)com.

About SNL Insurance
SNL Insurance provides statutory data including detailed financial data on each filer, reinsurance, investment and loss reserve schedules, data by state and line of business and hundreds of ratios, snapshots and analytics, available exclusively as part of SNL Unlimited service for Financial Institutions. SNL is the only information provider to offer clients a comprehensive insurance product, linking statutory data with public company data, mergers & acquisitions data, proprietary news, documents and more.

About SNL Financial
SNL Financial is a leading provider of financial information on more than 6,500 public companies and 50,000 private companies in the business sectors critical to the global economy: Banking, Financial Services, Insurance, Real Estate, Energy, Metals & Mining, and Media & Communications. The SNL information service integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. For more information, visit

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Christina Twomey
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